IMPACT OF OUTSORCING ON US ECONOMY

In business community the trend of outsourcing is emerging rapidly now a days. Most of the companies in United States tend towards the outsourcing and hire services from other companies/individuals. Mostly these services are hired for call centers, email, payroll etc. All these jobs are handled by other companies/individuals. Most of the time these services are hired from oversees companies. The basic motive behind the outsourcing is saving money.

There are some disadvantages of outsourcing as well, such as it eliminates direct communication between company and clients, Sensitive information is not well protected, sudden back out from outsource provider.
On the other side Outsourcing is extremely valuable for many companies. very positive impact on the overall economy of US.
There is a long debate on outsourcing is all around the US. Supporters argue that it has good impact on US economy, otherwise some business analysts do not agree.
According to supporters’ point of view, by this way companies not only save money but most of the Americans will retain higher level jobs in their own country. US companies will be able to gain significant goals towards cheaper imports and high cost exports.

Opponents who are against outsourcing argue that hiring people from foreign countries effects the US economy in a negative way and strips hundreds to thousands of Americans’ jobs, especially the skilled and semi-skilled workers. They argue that the loss of competitive advantage to other countries is permanent and the American worker and economy loses forever.
On the other side opponents argue that outsourcing is harmful for US economy because thousands of Americans will be jobless and consequentially other countries will get competitive advantage and US industry will suffer permanently.
Data provided by the University of California prove that most of the jobs will be lost in States especially in food, textile, leather, clothing and other middle level business sector. Even if people retain their job , they will loss wages up to 15 percent. The special job threat is for those people who belongs to Computer and technology industry.
Although outsourcing has long lasting positive and negative effects on State’s overall economy. Outsourcing may cause loss of income by local state, transferring of wealth to overseas. Lesser contribution of locals in Social Security and Medicare. In addition to it, sales and revenue will also suffer.
United States investors, shareholders and consumers think that outsourcing is beneficial for the business and for the country as well. They argue that outsourcing will help to increase trade in US products. It also help developing countries to get ability to pay back outstanding amount/debts to US.
Some experts believe that the greatest saving potential comes from outsourcing simple assembly work or services. Since there is not much capital involved, except for training people in other countries and payments for displaced U.S. workers, there is no other major investment.
Some experts believe that a strong saving potential can be obtained from outsourcing. By this way businesses do not need to train the people. In addition to it there is not major investment involve.
Although outsourcing is difficult to deal with but we cannot completely rule-out this trend. Some business analyst think that the companies get outsourcing should be taxed. By this way they will be the part of growing US economy.